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There is a disconnect at the moment in market valuations in equities, and the corresponding valuations in gold and oil prices, and that is creating a strange period of trade from the major pairs. The moves higher in oil and pound sterling trade has been breathless, there literally has not been an area recently that either has paused to test support in recent trade, TheLFB Trade Team members said. The equity market moves do not correlate with the percentage oil moves, and the other major pairs are not following cable percentage gains. As such one of two things happen; oil pulls back to support, or at worst stops at $69 a barrel for a while. Then euro, cad, swissy, and aussie start to move up hard to get aligned with cable values while cable stands still and waits for them, or cable pulls back in-line with the smaller percentage market losses that the overall dollar index is making.

On Monday cable moved 2.0%, euro moved 0.3%, swissy moved 0.1%, cad moved 0.1%, and aussie moved 0.5%; none of the other major pairs looks capable of matching the cable moves, the pair has outstripped them 10 to 1. We have not often seen oil or cable so far overbought on all time-frames, and it seems difficult to see both running into major resistance without a pull-back. Not to say that they cannot go higher, just that they both may need to pull back to test support first. the Trade Team said.